Bitfarms, Riot settle dispute with board changes

Bitcoin miners Bitfarms and Riot Platforms have reached a settlement that ends a months-long conflict over governance.

Andrés Finkielsztain will step down from Bitfarms’ board of directors as part of the settlement agreement. In addition, Amy Freedman will join the board, and Riot Platforms will withdraw its proposal for further board changes ahead of the upcoming special shareholder meeting.

According to a Sept. 23 announcement, the companies also agreed to a standstill arrangement lasting until 2026. Riot — which owns a substantial stake in Bitfarms — has agreed not to take any further hostile actions toward the company, including another takeover, increasing its stake above a certain threshold, or proposing changes to Bitfarms’ board. 

Bitfarms will also gain a sixth board member, subject to shareholders’ approval at an upcoming meeting to be held no later than Nov. 20, 2024. According to Bitfarms:  

“At the Special Meeting, shareholders will be asked to approve an expansion of the Board from five members to six members, to elect an independent director nominated by the Board to serve as the sixth member of the Board, and to ratify the Company’s July 24, 2024, shareholder rights plan. Riot has agreed to vote in favour of these matters.”

Governance dispute

The dispute between Bitfarms and Riot Platforms started in May 2024, when Riot, already one of Bitfarms’ largest shareholders, proposed a $950 million buyout of the Canadian Bitcoin mining company. 

Bitfarms rejected the offer. Following this, Riot began to increase its stake in Bitfarms, eventually reaching just under 15%, before Bitfarms triggered a “poison pill” defense to prevent further takeovers. In August, Riot Platforms purchased an additional $2.28 million to acquire an 18.9% stake in Bitfarms.

Riot also sought significant board changes in the company, including the appointment of three independent directors, citing concerns over Bitfarms’ governance and leadership.

The dispute’s backdrop included the fallout of Bitfarms’ former CEO, Geoffrey Morphy, who sued the firm in May for breach of contract, wrongful dismissal and damages, demanding $27 million.

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